In the capital of Algeria, food riots raged for a second straight day in Algiers. Food prices have risen dramatically, coupled with high unemployment. Other areas of Algeria are also experiencing civil unrest, including provinces bordering with Tunisia. Consumers are getting hit with inflation rates of about 5% per month. The price of essentials like cereal and sugar, two major imports for Algeria, are climbing fast. We’ve already seen unrest in Europe over government austerity measures. Europe is also facing increases in their cost of living, too. How long will it be before America faces the same?

food riots algiers
Increasing food prices and unemployment leads to riots in Algeria

Ever since the Crash of 2008, we have seen an extraordinary amount of liquidity being cranked out by central banks, including our own Federal Reserve. They, and our government, have been assuring us all that inflation is not a problem. Not yet, anyway. But in the last year, the prices for nearly every basic commodity, from rice to oil, has skyrocketed.

The cost of a barrel of oil has jumped 20% just since the Federal Reserve began it’s second round of ‘quantitative easing’, also known as ‘QE2′. Most of the ingredients for items on your grocery shelves have gone up 30%. Corn, wheat, sugar and coffee are all costing more. Even the price of seed stock has shot up, meaning that this year will not be any cheaper.

In Algeria, the cost of flour and salad oil has more than doubled. Like many nations these days, they also face high unemployment rates. Officially pegged at 10%, but some analysts believe the actual unemployment rate is closer to 25% in urban regions. The combination of both of these trends is wearing thin on the public.

Today’s U.S. job numbers show improvement, with some 103,000 jobs created in December, bringing the unemployment rate down to 9.4% from 9.8%. How did this happen? The Bureau of Labor Statistics (BLS) has been ‘adjusting’ their figures for months using a new set of factors. At best, the unemployment rate should have dropped to just 9.7%, if that. Many believe that these numbers are as phony as a three-dollar bill and that our actual unemployment rate is still closer to 18%, if not higher.

Any way you slice it, the food riots in Algiers is just another sign of the ‘new reality’. High food prices and unemployment rates are not isolated to just Algeria. It is a global condition, affecting much of Europe and the United States. China is adjusting the value of their currency in relation to the dollar due to inflation fears. More talk from world financial leaders abound on ditching the U.S. dollar as the currency for oil trading and for International reserves.

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